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Liberty Mutual Fire Insurance Co. v. Skorochod

United States District Court, E.D. Pennsylvania

March 29, 2017

LIBERTY MUTUAL FIRE INSURANCE COMPANY
v.
KAREN SKOROCHOD, et al.

          MEMORANDUM OPINION

          RICHARD A. LLORET UNITED STATES MAGISTRATE JUDGE

         I. Background of the Dispute

         The defendants, the Estate of Robert D. Mills, Jr., Robert D. Mills, Jr., and Cathy Vaughn (“the Estate”), have filed a motion to compel a deposition of the plaintiff's claims adjustor, with attendant document production, and an extension of the discovery deadline. Doc. No. 32. The plaintiff, Liberty Mutual Fire Insurance Company (“Liberty Mutual”) has opposed the motion. Doc. No. 33. The Estate filed a reply to Liberty Mutual's opposition. Doc. No. 35.

         Robert D. Mills, Jr., 17, died on October 29, 2012. Some of the details of the accident that caused his death are disputed, but the general outlines are clear enough. He and his friend, Anthony Skorochod, were driving in an ATV on a public street in the Township of Plainfield, Pennsylvania, when Robert hit his head on a downed tree. The tree had been knocked down in a storm. Robert did not have a helmet on. He died a few days later from the blow to his head.

         The Estate filed a complaint against Anthony Skorochod, the alleged driver of the ATV, and his mother, Karen Skorochod, the alleged owner of the ATV, in the Court of Common Pleas in Northampton County, Pennsylvania. Liberty Mutual, the Skorochod's property insurer, then filed this declaratory action in federal district court, seeking to establish that it had no duty to defend or indemnify the Skorochods. Liberty Mutual named the Skorochods as defendants, as well as the Estate and Cathy Vaughn (Robert Mills' mother).

         The Estate's motion to compel discovery is ripe for disposition.

         II. Discussion

         Liberty Mutual argues that the Estate is not entitled to the additional discovery. Its argument centers on the limited universe of facts relevant to this declaratory judgment action under the law of Pennsylvania. Liberty Mutual contends that under Pennsylvania law only the policy and the complaint are admissible evidence on the issue of coverage. Doc. No. 33, at 4-5 (citing to Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888, 896 (Pa. 2006). Under Kvaerner the duty to defend cannot be triggered by allegations outside the complaint. Id. at 8. Liberty Mutual also points out that the cases cited to by the defendants in support of their motion involved claims of bad faith by an insurer. Id. at 4. Since there is no bad faith claim in this case, Liberty Mutual argues, there is no basis for deposing the claims adjustor or receiving copies of the claims files. Id. Finally, Liberty Mutual notes that the discovery defendants seek would “necessarily require disclosure of information which is exempt from discovery including the attorney client privilege, the work product privilege and other protected areas . . .” Id. at 4.

         Perhaps anticipating the dispositive motion it intends to file, Liberty Mutual argues that the accident is excluded from coverage under the policy because it falls under the exclusionary language of Sections II(1)(f). Doc. No. 33, at 2. Section II(1)(f) excludes losses arising out of the use of “motor vehicles or all other motorized land conveyances . . . owned or operated by . . . an ‘insured.'” Doc. No. 32-1 at 2 (page reference is to ECF pagination) (Liberty Mutual Policy exclusion section). The exclusionary language has an exception for a “motorized land conveyance designed for recreational use off public roads, not subject to motor vehicle registration and. . . (b) Owned by an “insured” and not on an “insured location[.]” Doc. No. 32-1, at 3(ECF pagination). Liberty Mutual contends that the ATV in this case was not excepted from this general exclusion because it was on a public street at the time of the accident, not on an “insured location[.]” Doc. No. 32-1, at 3 (ECF pagination); Doc. No. 33, at 2. Liberty Mutual mentions that it intends to file a dispositive motion shortly. Doc. No. 33, at 3.

         The Estate's position, perhaps anticipating its opposition to Liberty Mutual's promised motion, is that the exclusion does not apply, because of an exception to the motor vehicle exclusion for a “vehicle or conveyance not subject to motor vehicle registration which is: (a) used to service an “insured's” residence[.]” Doc. No. 32-1, at 3 (ECF pagination); Doc. No. 35, at 2-3. As for its discovery motion, the Estate wants unspecified documents from Liberty Mutual's claims file - presumably, it wants a look at the entire file - and wants to depose the claims adjustor. Doc. No. 32. The Estate argues that the “claims file is a unique, contemporaneously prepared history of the company's handling of the claim. . .” Doc. No. 32, at 4.

         Federal Rule of Civil Procedure 26(b)(1) provides for discovery of

any non-privileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to the relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.

         Here, the Estate has not explained the relevance of the materials it seeks. Indeed, the Estate has not clearly explained exactly what materials it seeks, or expects to find. The Estate's initial memorandum focused on the supposed need to discover a “contemporaneously prepared history of the company's handling of the claim.” Doc. No. 32, at 2. In an opaque sentence, the Estate spoke of its

burden showing [sic] that the insurer lacked [sic] and that fact [sic] objectively reasonable basis in denying his claim, insurer [sic] and that the insurer knew or acted in reckless disregard of that fact [sic] discussing the insurer's view of the claim and rationale for denying it. As a general matter, ...

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